Archives for May 2020

The market trend remains with the same characteristics it has been exhibiting for the last two months, oscillating trading, up one day, down the next. Fortunately this is beneficial to the candlestick investor. The overall market trend remains in a slow upward direction, trading in a trading channel. As long as investor sentiment does not show any major reversal, the slow up trending nature, albeit oscillating from one day to the next, provides a much stronger trading environment. Without any evidence of severe selling, the bullish candlestick patterns, such as the fry pan bottom and the J Hook pattern, produce much stronger profitability without the fear of any strong selling in the overall market. Simple candlestick scanning techniques pinpoint which sectors are acting the strongest. Currently, the oil stocks have been moving up steadily with crude oil rebounding backup to the $34 area. Specialty retail stocks have been showing great strength. This week, the weeds stocks started showing strong bullish patterns. Having the visual candlestick evidence of where the most bullish strength is occurring allows investors to concentrate trading funds into the strong price moves.

Being able to identify which sectors are the strongest, the candlestick investor has the opportunity to scan those sectors to see which individual stock charts have the strongest bullish chart patterns. This is putting the stars in alignment. Identifying the bullish candlestick patterns produce two major benefits. First, it identifies with a high degree of probability the direction of a price move and secondly, those price moves will move with much greater strength than merely up-trending price moves in a slow up-trending market. Until there is a dramatic sell signal and a close back below the index T-line’s, it has to be assumed the uptrend remains in progress.

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Good investing,

The Candlestick Forum team.

Today’s positive trading was not unexpected when analyzing candlestick charts. The 50-day moving average illustrated it was acting as support when there was a piercing signal formed in the Dow on Thursday. The NASDAQ bounced off the lower trend channel and eventually closed above the T line on Thursday, then again on Friday. This provided the probabilities that investor sentiment was not ready to sell off the market. Investor sentiment is also easy to evaluate based upon the positive news this morning about the possibilities of a vaccine close to be in developed. Today’s positive trading puts the market conditions well in the middle of the trading channels, the NASDAQ showing much more bullish movement in an up trending channel. This is allowing for numerous candlestick patterns to work very effectively. The J hook patterns have been very profitable. The scoop patterns are setting up for strong slingshot up moves. Simple Candlestick scans find the strong trade set-ups very easily.

NAIL is a strong chart set-up as a scoop pattern breaking up through the 50 day moving average. The gap-up in today’s trading provides a high probability of a strong uptrend with a scoop pattern breakout. The numerous J-hook patterns recently recommended are continuing to show very good profitability. It is simple to maintain these profitable trades. Stay long as long as they close above the T-line. The slow up trending market allows for these type of patterns to perform with much greater upside potential, because there is not any bearish sentiment creating any hesitation in the pattern breakout moves. Utilizing pattern breakouts allows the candlestick investor to take advantage of the uptrend by being in positions that are going to produce much greater profitability than merely up trending stocks during an uptrend.

Chat session tonight at 8 PM ET.

Good investing,

The Candlestick Forum team.